2013 conference board leadership seminars diversity and inclusion

Data Means Corp. www.DataMeans.com

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A Small Supplier Perspective on Supplier Diversity Challenges and Opportunities

Table of Contents•Supplier Dynamics•Survey about Supplier DiversityPerceptions•Survey Results•Barriers to Engaging Small Suppliers•Supplier Engagement Dynamics•Recommendations

Diversity and Inclusion Leadership SeminarsForecasting & Measuring Diverse Human Capital Needs to Execute Business Strategy02 - 03 May, 2013


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• How companies engaged small suppliers translate into Synergies or lost business opportunities

Supplier Dynamics

Small Supplier Management Synergies

Innovation Efficiencies Cost Reduction

Procurement Goals

Supplier

Business Need

Supplier Diversity

Sweet Spot

FlexibleProcedures to know new small suppliers

Ability to scale up and down SOWs without repeating entire contracting process

Efficient Contracting Process

Meeting high quality deliverables in a timely fashion

Procurement & Supplier Diversity Goals Aligned

Flexibility to adopt to changes out of scope

Realistic payment conditions Repeatability &

Expansion

Supplier


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Survey about Supplier DiversityPerceptions

Some Crude #s about Supplier diversity

Survey Methodology :•Contacted about +1000 Linked In connections( mostly Pharma and Health Care) between March and April 2013 and ask them to answer an anonymous the survey.•About 60 responses 5% response rate•Results are only food for tough to feed a discussions about supplier diversityLimitations•Not a statistical representative sample of Linked In professionals•Not large enough number of responders to make any generalization


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Do people know about supplier diversity?


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Perceptions About Small Business

Knowledge About Supplier Diversity Program Among Company Employees and Business Unit

55% percentage of the respondents to the survey seem to lack knowledge about supplier diversity at their company


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Having adequate resources for educating employees about supplier diversity is important

Survey Results


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Supplier Diversity Manager has low visibility an interactions with some business units

Survey Results

Only 30% will consider doing business with large companies all or most the time.

Those with contracting authority only 50% will consider doing business with large companies all or most the time.


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In General People are open to Engage Small Suppliers

Business units are willing to consider small suppliers

Survey Results


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Business units are willing to consider small suppliers

In General People are open to Engage Small SuppliersSurvey Results

31% Agree that procurement procedures make it difficult to engage small suppliers.

31% don’t have time to get to know small suppliers.

Small percentage think small suppliers are unreliable 55% disagree that small suppliers

are unreliable

41% disagree have time to get to know small suppliers


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There are Barriers to Engaging Small Suppliers

Although Fortune 500 companies have a supplier diversity program and business units are interested in engaging new small suppliers , there are internal barriers for making this happening.

In certain situations engaging new small suppliers takes business units a lot of time and effort because it may conflict withprocurement procedures, strategies and goals.

Facing this challenges business units opt not to consider engaging small suppliers or try to circumvent procurement and supplierdiversity because their involvement tends to delay or complicate contracting process.

Survey Results


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Barriers to Engaging Small Suppliers

Common Barriers to do business with Small Suppliers

Small supplier is not in the

Preferred Vendor List

Procurement cost

reduction goals makes it

harder to work with

small suppliers

Insurance requirements are too high

for Small Supplier

Operation

Too many approvals needed

Payment terms (45 to 60 days) can caused cash

flow problems


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Supplier Engagement dynamics

Procurement Goals

SupplierBusiness Need

Supplier Diversity Procurement Goals

Supplier

Business Need

Supplier Diversity

Supplier meets business needs with no interaction with Supplier Diversity or Procurement

Supplier has a relationship with Supplier Diversity or Procurement but does not meet any business values

Procurement Goals

Supplier

Business Need

Supplier Diversity

Increase synergies To drive efficiencies by enlarging the sweet spot

Suppliers Increase value and opportunities

Meet more Businesses needs

Meet more Procurement and Supplier DiversityNeeds


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• Dedicate resources to educate employees and business units about the business value of supplier diversity

• Deploy efficient process to engage diverse suppliers

• Build synergies among procurement , Supplier Diversity, Business units and small suppliers to maximize business benefits

Recommendations

Contact: Alejandro JaramilloEmail: [email protected]:732-371-9512